11 Profit-Making Strategies
 By Terry M. Blair

Successful businesses are profitable businesses. Profits mean a bigger paycheck for you and maybe even a bigger business in the years to come.

If you’re looking for ways to squeeze more profits out of your small business, check out these 11 strategies:

1. Market consistently
   Market you products and services during the good times and the bad times. Develop a budget. Create a plan. Stick to it. Consistent marketing brings in new customers. And new customers help build your profits.
2. Get expert advice
   A savvy tax professional and sharp legal counsel can save you wads of money. Don’t waste your valuable time in critical areas where you have no expertise. Hire a pro that knows your business, your goals, your plans. Spending a little for expert advice can add a lot to your bottom line.
3. Manage your time
   Don’t fritter your day away on low-return activities. Earmark the majority of your time for profit-producing activities. Work on billable projects. Make sales calls. The more efficiently you work, the more profit you’ll make.
4. Bill and collect on time
   Establish strict billing and collection procedures. Send a bill as soon as you complete a sale. Include a due date on your invoices. If a customer doesn’t pay by the due date, start your collection procedure. The longer it takes you to collect payment, the more profits you lose.
5. Connect with customers
   It costs more money to find new customers than to repeatedly sell to existing customers. So follow up with current customers. Send thank-you notes. Make phone calls. Develop a follow-up system, and your profits will soar.
6. Scrutinize expenses
   Most small-business owners agonize over spending for large purchase. But it’s the little stuff that often drains profits from your pocket. Are you paying for magazines you don’t read? Are you getting the best deal you can on long-distance telephone service or Web hosting service? The monthly fees add up. Cut those costs. Your profits will improve.
7. Avoid extra fees
   Annual credit card fees, ATM usage fees, bounced check fees, late payment fees. The list goes on. Change your habits to avoid every fee you can. At the very least, minimize them. Every penny you pay in fees means one less penny in your profits.
8. Put technology to work
   The more efficiently you work, the more profitable your business will be. Maximize your energy and time by putting technology to work. Tools such as e-mail autorepsonders, computer-based accounting systems and voice mail will save you time. And time is money.
9. Upsell
   Want fries with that? Every time fast food joints ask you that question, they’re upselling. You can do the same. Bundle products so that customers spend a little more to get two items instead of one. Do the same with services. Show clients the value of upgrading to a higher-priced product or service. Each time you upsell, you up your profits.
10. Know your market
    Consumers are fickle. Their desires change with the wind. Just look at the toll that low-carb diets are taking on bakeries. To maintain your profits, you’ve got to change with your customers. Keep up with your market and your industry by attending trade shows and seminars. Read industry publications. Know the trends that will impact your profits.
11. Don’t go for glitz
    Do you really need slick, expensive marketing brochures, or will a direct mail postcard campaign do just fine? Is a snazzy office in a high-rent district necessary for your success, or could you opt for less expensive digs? Before you spend hard-earned dollars on flashy items, consider a less expensive option. The savings will add to your bottom line.

(Posted July 2004)

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